Coca-Cola India Case Study Analysis (2005)

Morgan Michna
Stefanie Schulz
Liana Berke
 Coca-Cola India Case Study Analysis 1  

When Coca-Cola entered the Indian market in 1933, it

struggled gaining consumer preference and sales. In response,
the company revamped its marketing strategy and focused on
positively impacting society in India through various local
levels. By 2003, Coca-Cola’s efforts were rewarded by
becoming one of the most favored beverage brands in India.
This all changed in August 2003, when the Center for Science
and Environment (CSE) – an environmental activist group in
India – released to the public that the companies soda
contained high amounts of pesticides threatening the health of
India’s citizens.

Communication Mistakes

Problem #1:
Coca-Cola India failed to conduct research on its audiences. It
did a poor job gathering information on individuals living in rural
India, the CSE, pesticide regulations, and the 11 soft drink
companies that were also accused of contamination (Kaye, 1).
This lack of knowledge was a major mishap in Coca-Cola’s
response to the CSE’s allegations.

Solution:
• In order to have reached its target audience with its
campaign, Coca-Cola should have conducted research
to find out what media its audience was exposed to and
how they received information. This way the company
could have ensured that its main consumers — rural
communities — were actually seeing that it was being
responsive to the CSE’s allegations (Kaye, 7).
• Coca-Cola should have surveyed how many people
living in rural communities heard of the allegations and
how they heard of them. This would have been
beneficial in figuring out which mediums Coca-Cola
could have used to reach the rural audience during its
campaign.
• The company should have conducted research on the
CSE’s history and its previous claims against other
beverage companies. This would have helped to
determine the organization's credibility.
• In order to properly defend itself, Coca-Cola should
have better familiarized itself with India’s pesticide
regulations within the beverage industry (Hills, 1).
 Coca-Cola India Case Study Analysis 2  

• Coca-Cola should have researched the other 11

companies that were similarly accused and taken their
tactics into consideration. This could have helped the
company understand how the other companies were
handling the situation.

Problem #2:
In 2001, Coca-Cola found extreme success in creating two
different marketing strategies – one for the rural community and
one for the urban community (Kaye, 6-7). The company
acknowledged that these audiences received and reacted to
information differently. However, Coca-Cola didn’t use this
tactic in its CSE campaign. While posting the “Myth vs. Fact”
section on its website was a good idea in theory, Coca-Cola
didn’t take into consideration that the rural community may not
have access to computers and the Internet (Kaye, 24-25).

Solution:
• Coca-Cola should have better planned its campaign to
utilize avenues of communication that the rural
population had access to. In turn, its response to the
CSE’s allegations would have spread throughout the
rural population more productively.

Problem #3:
Another tactic Coca-Cola employed was threatening legal
action against the CSE and filing a gag order following the
incident (Kaye, 12). Not only did this action exacerbate the
already deepening divide between Coca-Cola and its public,
but also it made Coca-Cola appear conspicuous and guilty.
Gag orders are not historically used often in crisis
communications and are widely viewed as unconstitutional, so
employing one had a negative connotation that further
damaged Coca-Cola’s image (Parkinson, 199). Regardless of
intent or culpability, Coca-Cola only succeeded in showing that
it might have something to hide.

Solution:
• Coca-Cola should have avoided filing a gag order
altogether.
• Gag orders are not commonly used in public relations.
This demonstrates that Coca-Cola could have
communicated and navigated its crisis without one.
• The organization should have only taken this route as a
last resort if all other options had been exhausted.
 Coca-Cola India Case Study Analysis 3  

Problem #4:
When Coca-Cola did answer to the public, it reacted by
attacking the credibility of the CSE, a defense mechanism that
only produced more discord (Kaye, 12). By doing this,
Coca-Cola lost an opportunity to collaborate with the CSE in
finding a solution that met all parties’ needs.

Solution:
• Instead of attacking the CSE, the organization should
have released a statement announcing that they would
look into this issue and conduct more research.
• Next, it should have partnered with the CSE and hired
researchers to look into the matter further. In turn, this
would have shown cooperation and have potentially
swayed public opinion.

Communication Highlights

Coca-Cola positively reacted to the CSE’s allegations in several

ways recognizing that it needed to reach out quickly to the
media and Indian public.

One of Coca-Cola’s strongest tactics was identifying its

opportunity to work with its rival Pepsi, who was similarly
accused by the CSE. Because the two companies were the
leading beverage manufacturers in India, they recognized it
would be productive if they addressed the CSE’s allegations
together. The companies held a press conference as their first
communicative step, knowing that their partnership would
generate high attention from the media.

Another good tactic Coca-Cola executed was releasing a

public statement to the Indian Public via CEO, Sanuiv Gupta:
“We take these allegations extremely seriously. I want to
reassure you that our products in India are safe and are tested
regularly to ensure that they meet the same rigorous standards
we maintain across the world” (Kaye, 12).

Additionally, the statement concluded by guiding the public to

view a “Myth vs. Fact” section on Coca-Cola India’s website.
Although it’s likely that a majority of India’s concerned citizens
did not have access to the Internet, this strategy factually
answered many questions, concerns and rumors that had
generated throughout the public.
 Coca-Cola India Case Study Analysis 4  

Overall, the statement showed that Coca-Cola was being

responsive to the CSE’s allegations and public’s concerns. It
defended the company’s reputation for producing high quality
products, and its intention was to sway public opinion into
questioning the validity of the CSR’s allegations.

Communication Suggestions for Today

If this situation were to happen today, we believe that the best

way for Coca-Cola to protect its reputation would be to
penetrate it brand image into the rural areas of India since
that’s where a majority of its population resides.

Research shows this audience identifies with brands through

word of mouth, and the best way to engender talk is by
targeting education and televisions: “…with the growing
aspiration levels (thanks to television), village youth who go to
the cities for education and employment have also become
important opinion leaders for lifestyle products” (Rajan).

Based on our findings we have three suggestions for

Coca-Cola:

1. Target schools by donating products — like pencils and

shirts — that children need with the Coca-Cola logo.
This will raise awareness of its brand and help improve
its reputation.
2. Hire promoters to hand out free products throughout the
rural audience. Promoters will be educated about the
Coca-Cola brand, so they can spread its mission and
values throughout this population. In addition, they will
be able to address any areas of concern.
3. Create television commercials that cause the public to
be inspired by Coca-Cola by highlighting what the
company has done to help India’s education, health, and
water conservation process.
 Coca-Cola India Case Study Analysis 5  

References

Hills, Jonathan. "Coca-Cola India - a Case Study." CSR Asia.

N.p., 14 June 2005. Web. 14 Oct. 2014. <http://csr-
asia.com/csr-asia-weekly-news-detail.php?id=4146>.

Kaye, Jeniffer. "Coca-Cola India." Arthur W. Page Society. N.p.,

2005. Web. 16 Oct. 2014.
<http://www.awpagesociety.com/wp-
content/uploads/2011/09/Coke_India_Case.pdf>.

Parkinson, Michael G. Restrictions on Access: Gag Orders,

Restrictive Orders, and Closure Orders. Law for Advertising,
Broadcasting, Journalism, and Public Relations. Mahwah, New
Jersey: Lawrence Erlbaum Associates, 2006. 199. Print.

Rajan, R.V. "Focused Communication for Rural India." The

Hindu Business Line. N.p., 20 July 2011. Web. 16 Oct. 2014.
<http://www.thehindubusinessline.com/features/brandline/focu
sed-communication-for-rural-india/article2276591.ece>.